Asia stocks push towards 6-month highs

By Elaine Lies

TOKYO (Reuters) - Asian shares rose on Friday, with South Korean stocks hitting a 6-month high after the country averted recession in the first quarter, as a Wall Street rally boosted risk demand around the region and dented the yen.

Many financial centers in the region were closed for a long weekend, making investors nervous that gains made now may not be sustained next week when many major U.S. companies report quarterly earnings.

The Nikkei hit a three-month closing high for the second day in a row, though off the day's peak reached above the psychologically key 9,000 level, as banks tumbled after Sumitomo Mitsui Financial Group (8316.T) warned of a net loss for the financial year just ended, reviving fears for other megabanks.

Nikkei .N225 edged up 0.5 percent to 8,964.11.

U.S. shares rebounded after Wells Fargo (WFC.N) said it expected to post a record quarterly profit of $3 billion, topping analyst expectations that sent the sector -- key to market sentiment -- sharply higher, with the S&P financial index .GSPF soaring 15.51 percent.

In Taiwan, this dovetailed with Cathay Financial (2882.TW) rallying after it reversed a year-ago loss to report market-beating first quarter profits, helping shares hit a 6-month high.

Taiwan's main TAIEX share index gained 2 percent to 5,781.96, while the Korea Composite Stock Price Index (KOSPI) rose 1.5 percent to 1,336.04.

Seoul shares gained additional upward impetus with a positive growth estimate for the first quarter from South Korea's central bank.

"The market was helped by Wells Fargo's stronger than expected first quarter results estimate, fueling hopes of stabilization in U.S. financial markets," said Won Jong-hyuck, a market analyst at SK Securities in Seoul.

Global investors have been keenly awaiting U.S. financial results, which move into high gear next week when Goldman Sachs, JP Morgan Chase and Citigroup are all set to report.

"If U.S. banks show some signs of improvements and stabilization, the index could make a more meaningful rebound. Better numbers from banks will point to stronger economies in the second half," said Lee Sun-yeob, a market analyst at Goodmorning Shinhan Securities.

But there was little joy for financials in Japan a day after its third-largest bank, Sumitomo Mitsui Financial Group (8316.T), said it faces a net loss of $3.9 billion for the financial year just ended and would raise as much as $8 billion through the sale of shares.

This revived worries for its larger rivals, seen as even more sensitive to declines in Japanese share prices, with No. 2 bank Mizuho Financial Group (8411.T) tumbling 9.6 percent.

EURO FALLS

The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 0.5 percent, back near a six-month peak hit on Monday.